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Crestwood Capital Corp. v. Andes Industries Inc.

United States District Court, D. Arizona

June 22, 2016

Crestwood Capital Corporation, Plaintiff,
v.
Andes Industries, Inc., Defendant. Devon Investment Inc., Plaintiff,
v.
Andes Industries, Inc., Defendant. Preston Collection Inc., Plaintiff,
v.
Steven Youtsey, Defendant. Andes Industries, Inc.; and PCT International, Inc., Plaintiffs,
v.
EZconn Corporation; and eGtran Corporation, Defendants. Andes Industries, Inc.; and PCT International, Inc., Plaintiffs,
v.
Cheng-Sun Lan; Kun-Te Yang; Chi-Jen Dennis Lan; Polar Star Management Ltd., Defendants. EZConn Corporation, Plaintiff,
v.
PCT International, Inc., Defendant.

          ORDER

          NEIL V. WAKE UNITED STATES DISTRICT JUDGE.

         Before the Court is EZconn Corporation's Rule 12(f) Motion to Strike Insufficient Defenses and Redundant, Immaterial, and Impertinent Matter (Doc. 91).

         I. LEGAL STANDARD

         Rule 12(f) of the Federal Rules of Civil Procedure permits the striking from a pleading of "an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." A motion under Rule 12(f) seeks to avoid the expenditure of time and money arising from litigating spurious issues by dispensing with them before trial. Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), rev'd on other grounds, 510 U.S. 517, 114 S.Ct. 1023 (1994); Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010). An affirmative defense is sufficiently pled if it gives plaintiff fair notice of the defense. Wyshak v. City Nat'l Bank, 607 F.2d 824, 827 (9th. Cir. 1979); Simmons v. Navajo Cty., Ariz., 609 F.3d 1011, 1023 (9th Cir. 2010).

         II. BACKGROUND

         EZconn Corporation's Complaint against PCT International, Inc., consists of 38 paragraphs and alleges one claim for breach of contract. (Doc. 1, CV-16-00508.) It alleges that over the course of 18 months in 2012 and 2013, PCT International ordered and received more than $6.6 million worth of product from EZconn that PCT International did not pay for. The Complaint identifies 146 invoices by number and shipped date, which allegedly remain outstanding and unpaid, and PCT International admits that, "to the best of its knowledge, the invoices listed correspond to products that EZconn manufactured for, and supplied to, PCT." EZconn seeks an award in the amount of the unpaid invoices, pre- and post-judgment interest, attorneys' fees, expenses, and costs.

         Defendants' Answer and Affirmative Defenses responds to the 24 paragraphs of EZconn's Complaint, alleges 67 paragraphs of "Facts Pertaining to Affirmative Defenses, " summarily identifies five affirmative defenses, and states that PCT International "reserves all rights to assert additional affirmative defenses." (Doc. 83.) It does not identify which of the 67 paragraphs of factual allegations, if any, support each of the five affirmative defenses.

         EZconn moves to strike each of PCT International's five affirmative defenses, its reservation of rights to assert additional affirmative defenses, and each of the 67 paragraphs of PCT International's "Facts Pertaining to Affirmative Defenses."

         III. ANALYSIS

         PCT International's 67 paragraphs of "Facts Pertaining to Affirmative Defenses" and conclusory identification of affirmative defenses do not provide EZconn with fair notice of PCT International's defenses. Responsibility for supporting each affirmative defense with factual allegations belongs to PCT International, not EZconn or the Court. PCT International cannot expect others to guess which of 67 paragraphs of allegations may support any affirmative defense. On that basis alone, all of PCT International's affirmative defenses and factual allegations would be stricken with leave to amend. However, as set forth below, each of the affirmative defenses is insufficient or redundant and is not subject to cure by amendment.

         A. "Set Off"

         Under the heading "First Affirmative Defense (Set Off), " PCT International alleges, "Any claim by EZconn for damages is limited and/or barred, in whole or in part, because those damages are subject to set off." (Doc. 83 at 21.) "A counterclaim or setoff is a cause of action in favor of the defendant on which he might have brought a separate action against the plaintiff and recovered a judgment. . . . If one is not entitled to relief in a direct action, one is not entitled to assert a setoff or counterclaim." W. J. Kroeger Co. v. Travelers Indem. Co., 112 Ariz. 285, 287, 541 P.2d 385, 387 (1975).

         PCT International contends that its set-off defense is based on the causes of action it pled against EZconn in its Complaint (Doc. 1, CV-15-01810) and Proposed Amended Complaint (Doc. 72, CV-15-00600). Because PCT International's claims were the subject of a pending action when EZconn commenced this action to recover payment for the 146 invoices, PCT International is not required to plead a counterclaim against EZconn for the same causes of action. Fed.R.Civ.P. 13(a). Nor is it required to plead them again as an affirmative defense. At most, the set-off duplicates ...


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